FHA Short Sales and Short Payoffs
Borrowers that were in default at the time of the short sale (or pre-foreclosure sale) of their previously owned primary residence are not eligible for a new FHA loan for three years from the date of the pre-foreclosure sale. This means, that buyers wanting to purchase a similar or superior property within a reasonable commuting distance will not be able to obtain a new FHA loan.
Borrowers are considered eligible for a new FHA loan if they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and the proceeds from the short sale serve as payment in full.
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